Robot 6

How it works: Michael Murphey on iVerse and Diamond Digital

Last week’s announcement that Diamond and iVerse would team up to form Diamond Digital, and sell digital comics in comics stores, left a lot of questions unanswered. So I went straight to the source: Michael Murphey, CEO of iVerse, which is Diamond’s digital partner in this deal.

iVerse is the company behind the Comics Plus app, as well as a number of branded apps, including IDW and Archie. Unlike comiXology and Graphicly, their apps run only on the iPad and the iPhone/iPod Touch, but that is about to change: As Michael explains below, they are expanding onto other platforms, which should make the program more attractive.

Brigid: I’m still trying to get a handle on how this works. I understand that customers who buy the digital copies will be handed a printed code, which they then redeem. How? Through iVerse’s digital storefront?

Michael: That is one way a retailer can sell a digital comic to a customer, yes. The retailer can also sell digital comics on their website. Codes can be redeemed on the retailer’s website or inside the Comics Plus application from iVerse.

Brigid: Will the sale go through the iTunes store?

Michael: No, these sales will be going through the retailers, both online and in-store.

Brigid: Where is the digital storefront? On the internet?

Michael: That’s right—the digital storefronts will be set up for retailers for their websites. The customer will stay on the retailer’s site, which could be theirdomain.com/digital or digital.theirsite.com—however they want to set it up. The customer can then read the comics right on their site, or download the comics to Comics Plus apps for a variety of platforms beyond iOS—which will all be coming throughout the year. A key for us in 2011 is getting the applications on as many popular platforms as we can.

Brigid: Let’s start with a retailer who has a website. Basically, you will set up a storefront that has the retailer’s name on it but is really an iVerse website on the back end, much like comiXology does, correct?

Michael: I can’t speak to how anyone else’s programs will ultimately function, but in concept they will be similar, yes. Two things I want to make clear about our program is that the the customer can stay on the retailer’s site to redeem their comics codes, buy new comics, and read the comics they have purchased. Our sites will also work with a retailer’s online payment methods so that they receive the money from the transaction when it happens—just like their online and in-store sales right now.

Comics Plus on the iPad

Brigid: If a retailer doesn’t have a website, the sales go through iVerse. Would they go through the iTunes store in that case? If not, how would you avoid that?

Michael: Apple requires that if you sell something outside of their market place that you give them the opportunity to sell it through In-App-Purchase as well. That’s what we’re doing here. We’re not necessarily trying to go around Apple because of some level of dissatisfaction. Quite the contrary actually. We’re very happy with Apple, and we’ve had a great relationship for the last several years. We’ll continue to work with Apple, and several other large OS providers, to make sure we’re offering a compelling product on their platforms…and with over 4 million downloads of iVerse powered products, we’re pretty happy with the audience iOS has brought us. The question is how do you turn that audience into a Direct Market audience? The news stand audience was converted—I’m a living example of that—we believe that a good portion of the digital audience will be the same. We’re going to do everything we can to bring those people into the stores, and we expect they’ll be interested in both digital and physical goods when they get there.

Brigid: What are the different roles of Diamond and iVerse in this service?

Michael: Well obviously Diamond brings a tremendous amount to the table on something like this, and it would be impossible to be as effective as we think we’re going to be without them. The payment and invoicing infrastructure they have is a key component to the program, and something that enables us to give the retailer payment at the time of the transaction and increase their percentage of the sale to as much as we possibly can. iVerse is providing things on the technical side when it comes to apps and the sites. Diamond is also spending a great deal of time and money to build out their own back end systems for this program. We do file conversion and adaption of the books for the publishers as well. This is also just the beginning of this partnership, and there are some really interesting things in the pipe that we can’t talk about just yet.

Brigid: Of the three big digital distributors, iVerse is the one that doesn’t have a web version or even compatibility between the different apps—if I buy something in the Archie app it doesn’t show up on the shelf of my Comics Plus app. Do you have plans to change that?

Michael: Yes, we’ve been working on that functionality for quite some time. With the Diamond integration, however, we couldn’t launch that kind of product before announcing the partnership. Thankfully that’s all behind us now, and we can move forward with everything. We’re very excited about it.

Brigid: Will readers be able to move their digital comics between devices?

Michael: Yes, we don’t want them to have to be married to one device or another. If they decide they want to switch to another mobile platform, we’ll do everything we can to let them migrate their comics. In some cases the publisher may choose to restrict that, but the vast majority of them do not.

Brigid: There has been a lot of negative reaction to this on the internet, most of which boils down to “Why should I go to my comics store to buy a digital comic?” What is your answer to that?

Michael: My answer to “why should I go to my comics store to buy a digital comic” is that you don’t have to. You can buy a digital comic online. You can already do that now without a retailer making anything at all off of it, or being able to let customers know about other products that they could by that you can’t get digitally like t-shirts, action figures, statues, prop replicas, and so on. What this program is doing is enabling retailers to be able to market to digital customers. If they come into the store and get the print version as well, they can get the digital at a cheaper price.

One of the things we strongly believe is that there are new readers out there who are finding comics for the first time digitally. We’re doing everything we can to incentivize them to explore the larger world of comics and comic retail shops. I found my first comic on a newsstand, and discovered the direct market later. We’re trying to help new readers who start digitally do that same thing. At the same time, retailers can sell digital comics to their customers. Many retailers we spoke to over the weekend at ComicsPRO thought this was a great way to sell back issues to their customers. An example we heard more than once was – say a customer is missing Issue #3 of a title. Issue #4 has come out on the shelf this week, but the retailer doesn’t have issue #3. The retailer could sell the customer a digital copy of issue #3 so the customer can complete the story and grab #4 today. They could even sell the customer the print copy of #3 and order that from Diamond, then give the customer a digital copy to read today. The customer could then come back into the shop to get their physical copy of #3 when it comes in.

That’s just one way we heard retailers talk about how they might use this program.

Brigid: What do you think this program will look like five years from now? Do you think comics shops will have upgraded their technology to the point where you could simply use a card?

Michael: I think the program will be very different 5 years from now. This is just the ground floor, and the program is already evolving based on retailer and customer feedback. There could be cards, kiosks…all kinds of different solutions. The one thing I know for sure is that the program will be very different 5 years from now than it is today. By then we’ll be on the iPad 6 or so, and who knows how many other tablets will be out there. It will be very interesting to see the evolution long term.

Brigid: Do you see this as ultimately being a comics-specific alternative to the iTunes store?

Michael: Yes, exactly. Not only that, but also a driver to help sell all of the great physical products that retailers have to offer than simply cannot be digitized. There is a great opportunity here to bring the two worlds together and lessen the digital divide for comics.

Whoiszat

Agreed a much better explanation of how this will work, although won’t this take the Local out the LCS? What’s to prevent me from clicking over to a competitor’s site? It’s a lot easier than driving to the next shop. Will all shops who participate in this program carry all the same digital comics at the same price? If a LCS sets up it’s Diamond Digital e-commerce site, what online competitive advantage will they have over another LCS that participates in the same program?

SwampRat

@ACMC:
“Michael: My answer to “why should I go to my comics store to buy a digital comic” is that you don’t have to. You can buy a digital comic online. You can already do that now without a retailer making anything at all off of it, or being able to let customers know about other products that they could by that you can’t get digitally like t-shirts, action figures, statues, prop replicas, and so on. What this program is doing is enabling retailers to be able to market to digital customers. If they come into the store and get the print version as well, they can get the digital at a cheaper price.”

“We’re doing everything we can to incentivize them to explore the larger world of comics and comic retail shops.”
This is only going to work the other way around as noted here:
“You can buy a digital comic online. You can already do that now without a retailer making anything at all off of it, or being able to let customers know about other products that they could by that you can’t get digitally like t-shirts, action figures, statues, prop replicas, and so on.”
This happens on Amazon all day long…”cutomers who’ve bought this have also liked…”

Also, implying that the comic shops are the larger world when compared to the digital marketplace is naive.

What will be the incentive other than climbing out of their chair, driving to a comic shop and looking for something that they probably can find easier online?

Comic shops have to offer something unique that these new readers will desire that can be found or experienced only at a comic shop. The digital comic will be a great resource to promote whatever that is but until that is realized I don’t see the incentive outside of curiosity.

But the bottom line comes to this: this is a plan aimed at benefited the retailer, not the consumer. Until the consumer is the focus, this digital venture is going to be treading water for quite some time.